What is bill? What are the places to purchase Treasury bills in Vietnam?

Hello, Lawnet would like to answer as follows:

1. What is bill?

Current law does not have specific regulations on the definition of bills. However, bill can be considered bill issued by State Bank of Vietnam or Vietnam State Treasury.

There are currently two common types of treasury bills:

- State Bank of Vietnam bill means a short-term financial instrument issued by the SBV for the purpose of implementing the national monetary policy (Article 3 Circular 16/2019/TT-NHNN).

- Treasury bill means a debt instrument issued by Vietnam State Treasury for a term of up to 52 weeks. (Article 3 of the Law on Public Debt Management 2017)

2. What are the places to purchase Treasury bills in Vietnam?

According to Article 13 of Decree 95/2018/ND-CP (amended by Clause 2, Article 2 of Decree 83/2023/ND-CP), regulations on Registration, depositing, listing and trading of treasury bills are as follows:

- Treasury bills issued through bidding shall be registered, deposited, listed and traded in accordance with regulations on registration, depositing, listing and trading of government bonds.

- Treasury bills issued directly to the SBV shall be registered and deposited at the Vietnam Securities Depository and Clearing Corporation, and listed at the Stock Exchange at the request of the SBV and the State Treasury.

In addition, Clause 6, Article 11 of Decree 95/2018/ND-CP stipulates 02 methods of issuing treasury bills as follows:

Method 1: Bidding for issuance of treasury bills

- Bidding principles:

+ A bidder’s bid information must be kept secret.

+ Bidders shall have their rights and obligations ensured openly and impartially.

- Bidding forms:

+ Competitive bid; or

+ Combination of competitive bid and non-competitive bid. If a bid session is conducted in this form, total amount of bonds offered to non-competitive bidders shall not exceed 30% of total amount of bonds offered in that bid session.

- Bidding results shall be determined by adopting either the fixed-rate tender method or the variable-rate tender method.

- The issuer shall directly organize bidding for issuance of treasury bills or organize bidding via the Operations Center of the SBV in accordance with regulations of the Ministry of Finance.

Method 2: Issuance of treasury bills directly to the SBV in accordance with regulations in Article 12 of Decree 95/2018/ND-CP

Thus, people may now purchase treasury bills at the Stock Exchange at the request of the State Bank of Vietnam and the State Treasury, or at the Operations Center of the SBV.

3. Current regulations on Debt instruments of the Government in Vietnam

According to Article 27 of the Law on Public Debt Management 2017, the Debt instruments of the Government issued in the domestic capital market include:

- Sovereign bonds;

- Treasury bills;

- Development bonds.

 According to an annual public borrowing and repayment plan, the Ministry of Finance shall issue debt instruments of the Government.

The process for issuing debt instruments shall be through bidding, underwriting or private placement.

Total the Government loans shall be included in the central budget. The Government must set aside an enough sum of money to repay principal, interests, and other related expenses on a due debt.

The Government sets forth issues, registration, deposit, listing and dealings of debt instruments of the Government in the securities market.

Best regards!

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